Study Finds that Institutions Most in Need of Retention Support are the Least Likely to Be Using Retention Technology

Boston, MA – July 17, 2020 ​ ​ACT® | NRCCUA®, an educational data science and research organization, announced the release of Eduventures Market Analysis: Student Retention Solutions. This report is designed for public and private four-year institutions and vendors who wish to have a deeper understanding about the Student Retention Solutions (retention solutions) segment and how this technology has been adopted by U.S. higher education. Retention solutions covered in this report include those offered by vendors such as Civitas, Campus Labs, Blackboard, Hobsons, EAB, Jenzabar, Oracle, and Salesforce.

The retention solutions analyzed in this report are designed to enable colleges to collect, monitor, and act on student data to improve retention. Functionality within these solutions includes an “early warning system” for at-risk students, a forum for communication between advisors, faculty, and students, and methods to manage student academic interventions. The segment is characterized by both point solutions and by enterprise solutions that have specific retention functionality built into them.

Troubling Trends in Student Retention

Over 35 million students have attended college but never earned a credential. Retention rates, with too few exceptions, remain stubbornly low—especially for the most vulnerable populations. While community colleges collectively improved retention at an average rate of 2% between 2014 and 2018, public four-year institutions—where the majority of students enroll—saw less than a 1% improvement, and four-year privates saw their average retention rate decline (Figure 1).

Key trends featured in Eduventures Market Analysis: Student Retention Solutions include:

1. The Rise of the Retention Market

While many retention solution providers have served higher education for well over a decade, the current market leaders did not achieve a significant market presence across higher education until the 2010s. From 2010 to 2015, institutions rushed to acquire retention solutions. Large publics were the most prominent buyers. During this time, the segment as a whole saw multiple years of 30% growth or higher.

In recent years this has slowed, with only 7% growth reported in 2018 and 4% growth in 2019. The combination of market maturation, the development of retention functionality within enterprise solutions, and an overall slowdown in the rate of new technology acquisitions across U.S. higher education is contributing to the limited adoption of retention solutions as of late.

2. The Current Landscape

60% of four year publics are currently using a retention solution. Private four-year institutions are far less likely to use a retention solution, with an estimated 20% saturation in this sector recording use of at least one solution. Nearly one third of institutions that have a retention solution are using more than one.

Institutions should rest assured that no single solution has proven itself to be the “solution of choice.” This is true even when segmenting the market by sector, or by enrollment size or based on the percentage of Pell-eligible students.

3. Impact on Retention

The percentage of institutions that have improved their retention scores is greater among schools with retention solutions than among institutions generally: 4% greater among public institutions, and 8% greater among privates. Correlation is, of course, not causation; many factors, including the inherent demographics of an institution’s study body or their overall retention strategy likely contribute to this outcome.

4. Disproportionate Technology Access

The institutions that need the most support in retention are the least likely to use a retention solution: 45% of institutions with a retention score of 80% or more use a retention solution, while just 5% of institutions reporting a retention score below 50% have one. This finding raises questions about whether these products are being deployed in a way that impacts the most vulnerable student populations.

According to Michael Miller, Eduventures Senior Analyst, ACT | NRCCUA, “Many vendors offer products with similar functionality and they will need to compete on product differentiation, ease of integration, and their overall fit into an institution’s technology ecosystem. Enterprise solutions like the SIS and CRM are also making strides in providing retention functionality. Institutions often make expensive technology decisions without knowing what the landscape for this market really looks like, and without the benefit of unbiased evidence that these solutions will deliver on their promises—the goal with this report is to help fill that gap.”